Agenda item

To receive a verbal report by the Education Planning and Resource Manager on the financial management of schools.

The HIA provided a summary of the background to issues pertaining to the financial management of schools and explained that the concerns raised related to school credit balances rather than deficit balances.  He informed the Committee that from an audit prospective they were well managed despite having pressures on specific balances.  The Head of Customers and Education Support had met with Members and this had provided assurances in relation to the current position.

A copy of the three year forecast by school for 2014-15 to 2015-16 was circulated at the meeting.  Councillor P.C. Duffy expressed concern that the document had not been circulated to Members of the Committee prior to the meeting.

The Education Planning and Resource Manager (EPRM) summarised the three year forecast paper which provided details of the Total Surplus/(Deficit) figures for the 2014/15 Budget, 2014/15 Surplus (deficit), Actual % to variance to budget, Claw back over 5% threshold and over the WG threshold.

The following issues were highlighted by the EPRM:-

-                  WG recommended level of balances being £3,3m.

-                  Total surplus for all schools currently recorded at £2.9m, which was below the recommended Denbighshire Policy of 5%.

-                  Some schools were carrying balances in excess of 5%.

-                  Change of WG Regulations in September, 2010, provided Local Authorities with the power to claw back balances in excess of £50k for primary and £100k for secondary schools.

-                  Denbighshire currently £400k below WG recommendation for balances for total schools. 

-                  Due to broad spectrum of schools Denbighshire had decided not to enforce the rule in their schools.  The impact over a three year period being more relevant than over one year.

-                  Reference made to the relevance and impact of a standstill budget for schools until 2014/15 and 2015/16.

-                  The WAO Representative questioned the reason for two secondary schools having greater balances than other schools.  The EPRM explained that the schools were special schools and the retained balances were for the undertaking of programmed work at the schools.

-                  In response to questions raised, the EPRM explained that Ysgol Pendref was a school in financial difficulty, and a recovery plan was currently being developed.

The EPRM referred to the three year plan and informed the Committee that           circulation of the secondary school budgets was imminent.  However, those relating to primary schools would be delayed due to WG changes relating to the funding foundation phase.  Finance managers would work with the school governors and headteacher to produce a revised three year plan, the details of which would then be incorporated into the figures circulated.

During the ensuing discussion, the Committee agreed that consideration of a further report be included in the forward work programme of the Scrutiny Chairs and Vice-Chairs Group for deliberation.  The CA felt that it might be beneficial if the report coincided with the report on the final position for 2014/15.

In reply to a question from Mr P. Whitham, the EPRM referred to the schools purchasing rules and provided details of the provision of training for school staff to ensure compliance with the new CPR‘s.

RESOLVED – that Corporate Governance Committee:-

(a)            receive and note the contents of the report, and

(b)            request that consideration of a further report be included in the forward work programme of the Scrutiny Chairs and Vice-Chairs Group.

     (JW, CW and RW to Action)